California Pacific Airlines' bid to fly commercially out of Carlsbad's McClellan-Palomar airport is once again delayed.

But this time, blame across-the-board federal budget cuts called sequestration, and not turbulence directly with the Federal Aviation Administration.

The new hold-up comes less than a month after the proposed airline and the FAA worked out what the federal agency had called major issues with its initial application to operate. In April, the application advanced out of the FAA's preliminary phase.

But last week, the FAA sent owner Ted Vallas a letter saying it didn't have the personnel to continue evaluating the application.

"At this time we regret to inform you that we are temporarily suspending the certification of California Pacific Airlines," said the May 2 letter, written by Keith Ballenger, an assistant manager for the flight standards division. "While the furlough of Federal Aviation Administration employees has been suspended the FAA is still under sequestration. This has directly impacted our ability to build our certification team."

It has now been more than three years since Vallas, 92, filed his initial statement of interest with the FAA. He envisions a commercial airline based in North County, serving San Jose, Oakland, Sacramento, Las Vegas, Phoenix, and eventually Cabo San Lucas.

Last year, California Pacific's initial application to fly was returned by the FAA, which cited concerns over maintenance, safety, flight crew training and personnel. Those alleged shortcomings were ultimately settled after the airline hired a new CEO and resubmitted materials.

Yes
42% (226)

No
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538 total votes.

The letter said the FAA would re-evaluate whether it has the resources to work on the application every 45 days.

John Selvaggio, hired in March as the airline's CEO, said Tuesday that he hadn't yet received the letter but knew of the issue. He said the airline management is meeting with FAA officials later this week to see if the process can be sped up, despite the budget cuts. He stood by his previously stated expectation that California Pacific would still fly by the end of the year.

"When I said the end of the year I had anticipated there would be some kind of snag here or there," he said. "It's quite frustrating but it was somewhat anticipated once we heard about sequestration, we knew it was an across the board hit."

In March, the federal government initiated $1.2 trillion in across-the-board spending cuts to take place over the next 10 years because Congress and President Obama couldn't reach a deal to avoid them. The cuts hit many federal agencies, including the FAA.

The airline's only plane - a 72-seat Embraer regional jet - landed at Palomar to fanfare last July but for months sat idle on the tarmac as the application dispute went on. Vallas is paying $200,000 per month to rent the plane. Today, it's in Phoenix, leased to Honeywell, which is covering the costs for the airline, Selvaggio said. He said California Pacific has still raised about $11 million from investors.

Vallas, a Rancho Santa Fe resident who started Air Resort Airline in the 1980s, said he was especially frustrated that the airline wouldn’t try to raise more funds until the FAA lifted the sequestration hold. But he still believes California Pacific will be in service by the end of 2013.

“I’ve been working so hard at it for three years,” he said. “We feel very confident that by the end of the year we will be ready to fly.”